OCR 2880 (ACE) - Why build a railway line when a bus will do?

One of the strategic choices facing students in the OCR 2880 case study is a potential project to build a railway line linking the ACE airport to the national rail network. Here’s what the real-life airport behind the case study has actually done when faced with the same challenge.

The business in question is East Midlands Airport. Back in 2007, planning permission was finally given for Network Rail to build East Midlands Parkway, a new “green” railway station which has been built one mile from junction 24 of the M1 motorway and next to the A453 that connects Nottingham, to the M1 and East Midlands Airport. The station opened in January 2009.

How has East Midlands Airport responded to the new station? Build a spur link directly to the airport?

Sounds like a smart move to me. It avoids a substantial investment risk and minimises the loss of lucrative car parking revenues. Yet it still provides an environmentally-friendly service for customers who wish to travel to the airport via the rail network. If demand proves greater than expected, then simply add more shuttle buses to the service. Like so many things in business strategy, think KISS - “keep it simple stupid”!

Jim Riley

Before founding tutor2u with twin brother Geoff, Jim was a director at Thomson Travel Group Plc and a Corporate Finance and Strategy specialist at PwC. Jim is graduate Economist, a Fellow of the ICAEW and has a MBA (Distinction) from Bradford Management School.

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